Correlation Between Hamilton Global and OVH Groupe

Can any of the company-specific risk be diversified away by investing in both Hamilton Global and OVH Groupe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hamilton Global and OVH Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hamilton Global Opportunities and OVH Groupe SAS, you can compare the effects of market volatilities on Hamilton Global and OVH Groupe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hamilton Global with a short position of OVH Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Global and OVH Groupe.

Diversification Opportunities for Hamilton Global and OVH Groupe

0.85

Correlation Coefficient

Hamilton Global  OVH Groupe

Very poor diversification

The 3 months correlation between Hamilton and OVH is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Global Opportunities and OVH Groupe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVH Groupe SAS and Hamilton Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hamilton Global Opportunities are associated (or correlated) with OVH Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVH Groupe SAS has no effect on the direction of Hamilton Global i.e., Hamilton Global and OVH Groupe go up and down completely randomly.

Pair Corralation between Hamilton Global and OVH Groupe

If you would invest  833.00  in OVH Groupe SAS on October 3, 2024 and sell it today you would earn a total of  40.00  from holding OVH Groupe SAS or generate 4.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Hamilton Global Opportunities  vs.  OVH Groupe SAS

Hamilton Global Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Global Opportunities are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Hamilton Global is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

OVH Groupe SAS

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OVH Groupe SAS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, OVH Groupe sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hamilton Global and OVH Groupe

The main advantage of trading using opposite Hamilton Global and OVH Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Global position performs unexpectedly, OVH Groupe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OVH Groupe will offset losses from the drop in OVH Groupe's long position.

The idea behind Hamilton Global Opportunities and OVH Groupe SAS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.